CarMax Second Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component CarMax (NYSE:KMX) will unveil its latest earnings on Thursday, September 20, 2012. CarMax is a retailer of used vehicles in the United States. The company also sells new vehicles under franchise agreements with Chrysler, General Motors, Nissan, and Toyota.

CarMax Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for profit of 51 cents per share, a rise of 4.1% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from 52 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 51 cents during the last month. Analysts are projecting profit to rise by 5% compared to last year’s $1.88.

Past Earnings Performance: Last quarter, the company met expectations by reporting net income of 52 cents per share last quarter. In the previous fourth quarter of the last fiscal year, the company beat estimates by one cent.

Stock Price Performance: Between July 19, 2012 and September 14, 2012, the stock price had risen $5.06 (18.5%), from $27.28 to $32.34. The stock price saw one of its best stretches over the last year between November 23, 2011 and December 6, 2011, when shares rose for nine straight days, increasing 16.9% (+$4.52) over that span. It saw one of its worst periods between January 23, 2012 and January 31, 2012 when shares fell for seven straight days, dropping 6.9% (-$2.27) over that span.

Wall St. Revenue Expectations: Analysts are projecting a rise of 5.8% in revenue from the year-earlier quarter to $2.74 billion.

A Look Back: In the first quarter, profit fell 4.4% to $120.7 million (52 cents a share) from $126.3 million (55 cents a share) the year earlier, meeting analyst expectations. Revenue rose 3.5% to $2.77 billion from $2.68 billion.

Key Stats:

The company is looking to get back on track with this earnings announcement after a profit drop last quarter snapped a positive string of results. Net income rose 3.7% in the second quarter of the last fiscal year, 0.5% in the third quarter of the last fiscal year and 3.7% in the fourth quarter of the last fiscal year before declining in the first quarter.

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 10.5% in the second quarter of the last fiscal year, 6.7% in the third quarter of the last fiscal year and 9.9% in the fourth quarter of the last fiscal year before increasing again in the first quarter.

Analyst Ratings: With 10 analysts rating the stock a buy, none rating it a sell and two rating the stock a hold, there are indications of a bullish stance by analysts.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 3.12 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands.